Private labs may move SC over testing order

Simultaneously, they are also lobbying with the government to intervene in the matter, as the apex court had, in an interim order on Wednesday, asked the government to ensure that private labs conduct the tests free of charge.

NEW DELHI/MUMBAI: India’s top private diagnostics laboratories are thinking of moving the Supreme Court, seeking to reconsider its order directing free testing for Covid-19 virus infections.

Simultaneously, they are also lobbying with the government to intervene in the matter, as the apex court had, in an interim order on Wednesday, asked the government to ensure that private labs conduct the tests free of charge.

Currently, the labs, including SRL Diagnostics, Max Labs, Dr Lal PathLabs and Core Diagnostics, are in the process of drafting a petition that is expected to argue that testing for free is a move that is financially unviable.

India, the second-most populous nation, is currently under a 21-day lockdown in the wake of the pandemic that has claimed at least 150 lives so far.

The plea is also likely to contend that some private labs may even be forced to shut down if tests are conducted free of charge.

“The Covid-19 pandemic has achieved enormous proportions, thus all essential services including those being offered by the Applicants have suffered a major setback… the revenue of the Applicants has been completely denuded, however, the overhead costs to be borne by them remains fixed,” the draft petition, a copy of which ET has accessed, read.

Since private labs import the test kits, costs have increased due to higher global demand, the petition said.

“There are costs involved - raw material, manpower, for example, as we don’t manufacture testing kits… Technicians have to be provided with Personal Protective Equipment, but the cost of these PPEs is not reimbursed,” the CEO of a leading diagnostics company told ET on the condition of anonymity.

A number of India’s leading diagnostic laboratories started conducting the tests at a government mandated price cap of Rs 4,500 per test after the Indian Council of Medical Research (ICMR), the country’s nodal health research body, gave approvals to some labs to start testing for Covid-19 infections on March 24.

“Government or corporates, through their CSR funds, should reimburse Rs 2,000-Rs 2,500 to private labs so that their material costs are recovered,” said GSK Velu, managing director of Neuberg Anand Diagnostic Laboratory, a private lab chain that is conducting tests for Covid-19 infections.

A total of 204 labs are conducting the tests currently, of which 65 are private labs.

The test is free at government labs.

The owner of a well-known diagnostics laboratory said that since it was a “complex molecular biotechnology test”, the lab’s basic cost was "very high".

“We will do tests free of cost for now, but we don’t know how long we can afford this,” said Ravi Gaur, COO of Delhi-based Oncquest, adding that since most labs were not doing routine tests anymore, business is down by 80%.

According to another diagnostics lab owner, the order has disincentivised private laboratories.

“They (labs) are also providing insurance cover to their employees to provide safety while carrying out tests,” he added.

When contacted, Dr Arvind Lal of Dr Lal PathLabs declined to comment.

Testing in private labs has not taken off, barring a few states, as labs faced bottlenecks like availability of diagnostic kits, confusion with regard to guidelines and protection of its staff.

Maharashtra has been the only state where private labs have been allowed to operate smoothly, with a state document showing that nearly 7,893 tests of its total 20,877 tests being done at private labs.

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